Do you rely on a Designated Engineering Representative (DER) to approve data for your business? Do you use DMIRs for issuing 8130-3 tags? If you do, then you know how critical designees can be to the parts approval process. Often, though, designees are required by the FAA to do things that the FAA employees themselves are not permitted to do, like require paperwork that is not required by law or regulation (this can be a violation of the Paperwork Reduction Act), or impose standards of conduct that are not required by law or regulation (this can be a violation of the Administrative Procedures Act). When this happens, the designee has no choice but to obey the instructions from the FAA-Advisor … even if they would be illegal if undertaken by the FAA’s employees.

Want to make sure that designees are not used to do things that FAA employees can’t do (by law)? The be sure to take the time to offer comments to the FAA Designee Management Policy that is now out for comment. The FAA has issued for public comment a draft change to the guidance document affecting designees. Although only parts are changed, it is a potential opportunity to comment on the entire document.

This guidance document provides a wide variety of guidance on how to manage FAA designees. It has not and does not appear to cancel FAA Order 8100.8 (Designee Management Handbook), although some of the guidance appears to address some of the same issues as that guidance (failure to cancel 8100.8 might have been an oversight).

As a practical matter, designees (who are the people most directly affected by this guidance) will not be able to write comments that are critical to this guidance. This is because designees can be terminated for cause or without cause, at the discretion of the FAA. So the FAA can terminate a designee for exercising his or her First Amendment freedoms (as long as they come up with any other pretext for the action, including a termination ‘not for cause’). Designees are well aware of this and they regularly self-censor their comments because of the chilling effect that the FAA’s discretionary termination power has had. In some cases, designees have contacted me because they know that I will protect their anonymity.

The real-world issue us that designees rely on their designation from the FAA to ply their trade. If they are terminated (for-cause or not-for-cause) then they cannot simply be a designee for someone else. They need to choose a entirely different career path. So the process for reviewing designee termination is very important. And both the current policy and the draft policy are woefully inadequate, because they offer no standards for review, so the FAA employees are able to rubber stamp any termination decision on review. Honest review depends 100% on the personal integrity of the reviewing personnel – and there is no formal training for the employees who act as reviewers in that process (by comparison, state court judges typically attend judicial training).

The FAA’s failure to have effective standards actually undermines the FAA’s own interests. One example arises in the context of designee termination. The lack of effective standards means that individual FAA employees can cause the termination of a designee for any reason, including a reason that would have been considered to be illegal if it was used to terminate an employee, as long as the party who initiates the termination offers a pretextual reason. There is no formal inquiry into such pretext – it is taken at face value – and the VERY short time period for presenting a defense means that it is tough to be effective in assembling a defense: the full appeal including all supporting evidence must be submitted within 15 days – while the designee is given the charges, he or she has no opportunity to review the FAA’s underlying evidence. In comparison, the appeals panel has 45 days to consider the appeal and then another 15 days to notify the designee of their decision for a total of 60 days. We have seen evidence that FAA inspectors will use this period to gather more evidence to refute the defense and bolster the ‘prosecution’ so clearly the FAA is not bound to any sort of deadline for presenting its own case.

There is plenty that could be improved in the designee management process.

This is a great opportunity to help the FAA to better manage the designee community using effective processes that ensure fairness for everyone. MARPA members should strongly consider reviewing and commenting on this draft guidance.

Comments are dues to the FAA by January 7. Please send comments to MARPA, as well, so we can sure that our comments reflect your concerns.

UPDATE:

My comment on the cancellation of FAA Order 8100.8 failed to take into account FAA Notice 8000.372. That Notice directs all AIR manufacturing personnel who oversee designees to stop using Order 8100.8 and being using 8000.95 on a schedule. The schedule reflects the implementation of the Designee Management System (DMS) in those offices.

Under that schedule, all MIDOs with designee management responsibilities should have transitioned to Order 8000.95 during the summer (of 2014). So Order 8000.95 will have supplanted 8100.8 for MIDOS (but not necessarily for ACOs and FSDOs). This means that DMIRs and DAR-Fs have transitioned. But DERs should still be under 8100.8 until they are formally transitioned (at which time they will fall under the instructions of 8000.95).

Have you ever been frustrated to learn that an AD went out that references a service bulletin, and (too late!) you later learned that the service bulletin made disparaging remarks or provided inappropriate directions about your company or your parts?

How do you prevent this situation? You need to get a copy of the service bulletin that is cross referenced by the AD, and review it before the AD rule becomes final. But sometimes no one will provide the service bulletin to you!

That just shouldn’t be the case. If an AD might indirectly affect you because of the cross referenced service bulletin, then you should be entitled to review the service bulletin before it becomes part of a regulation.

The U.S. government agrees!!

The U.S. Office of the Federal Register has published a new rule designed to make government rules more transparent. It accomplishes this by addressing incorporation-by-reference.

What is Incorporation-by-Reference?

Incorporation-by-Reference (or IBR) is the term for regulations that make reference to some other document that is not published in the rule. Historically, incorporation-by-reference came about because it cost money to print the Federal Register, and wasting a lot of pages on a standard that could easily be obtained outside of the Federal Register. But today, most people access the regulations and the Federal Register on line, so there is not as much of a burden associated with publishing such documents. Incorporation-by-reference can be an issue for the public because when an incorporated document is merely technically available – but it is not really available – then this can make it difficult or impossible for an affected person to comply with the regulation (and can make it impossible for the affected person to even know that (s)he is subject to the regulation).

In short, unavailable-but-incorporated documents can reflect secret regulations that are impossible to comply with.

With this in mind, the Administrative Conference of the US began to study what could be done to update the rules to reflect modern technology. This ultimately led to the Office of the Federal Register looking into potential changes to the rules on incorporation-by-reference.

Some Problems with Incorporation-by-Reference

The aviation industry faces many challenges related to incorporation-by-reference. An issue that can be very important to MARPA’s members is the availability of referenced documents in Airworthiness Directives(ADs), like service bulletins. Service bulletin language can affect PMA parts, and can even disparage PMA parts in ways that are inappropriate.

Timely availability to the PMA community of these service bulletins can be a serious issue. It is typical for the FAA’s incorporation-by-reference statement to insist that the incorporated service bulletins be obtained either from the FAA office or from the OEM who published the document. In order to test this system, I emailed an FAA office and an OEM who were described as the sources of a service bulletin (the Federal Register listed the emails and listed this as an acceptable way to make contact). The FAA response was that I should go to the OEM. The OEM response was to ask me why I wanted the service bulletin. When I responded that the service bulletin was incorporated by reference in a proposed AD, and I wanted a copy of the service bulletin to determine whether the trade association needed to file comments on behalf of the membership, I received no further communication from the OEM. They just stopped responding to me.

The result was a new rule that clarifies obligations related to regulations that incorporate standards by reference.

What Changes Should You Expect?

It is important that incorporated material be available in proposed rules so that the public can comment on the proposed rule with full knowledge fo the proposed rule’s impact. Under the new standards (1 C.F.R. 51.5(a)), the preamble to a proposed rule must :

Discuss the agency’s efforts to make the IBR materials reasonably available to interested parties, and

Summarize the material it proposes to incorporate by reference in the preamble.

When the agency is ready to publish a final rule with an IBR, the agency must do the following (1 C.F.R. 51.5(b)):

Ask for permission from the Office of the Federal Register to accomplish an IBR,

Explain in the preamble to the final rule how interested parties can get a copy of the IBRed materials (it must be “reasonably available”), and

Ensure a copy of the IBRed publication is on file at the Office of the Federal Register.

An important feature of the regulations is the requirement to discuss availability to “interested parties.” This is an expansion of the traditional language, which merely required availability to “the class of persons affected by the publication.” Interested persons should include persons who are indirectly affected (like those whose PMA parts MIGHT be affected in the case of an airworthiness directive) in addition to class of persons directly affected by the publication (which is generally operators).

The regulations continue to explain that IBR is limited to the edition that is incorporated. So if a subsequent revision of a service bulletin comes out, only the version that was approved by the Office of the Federal Register is the version that is IBRed (and not subsequent versions). 1 C.F.R. 51.1(f).

One sad omission was that the new rule does not define “reasonably available.” The Office of Federal Register was worried that a definition might be inappropriate, so they were hesitant to offer a definition, and instead they have left it to a case-by-case analysis as defined by each agency. But it seems certain that if you make a reasonable effort to obtain an IBRed service bulletin using the mechanism in the Federal Register, and you are denied, then you may have a claim that the service bulletin was not reasonably available.

While we did not get every change we requested, this nonetheless represents a good start on the process of providing better transparency in the situations of incorporation-by-reference.

In January, we wrote in this space about two new FAA Policy Statement proposals aimed at increasing coordination between FAA offices in the cases of certain engine PMA and propeller PMA applications. MARPA is always on the lookout for those potential regulations and policies–whether large or small–that could effect our members. In an effort to best support the industry, MARPA solicits feedback from members and files comments addressing the concerns of the PMA community with the FAA. MARPA also works to support the FAA in order to provide industry’s perspective and needs in order to help develop the best rules, policy, and guidance possible.

Last week we filed comments on draft policy statements PS-ANE-33.3-05 and PS-ANE-35.15-02. These two statements were substantially similar in content, and therefore raised similar concerns. The policy statements are intended to create a uniform policy describing the engine and propeller PMA projects for which an ACO is required to use the national certification project notification (CPN) database to alert the Certification Management ACO (CMACO) and Engine and Propeller Directorate (EPD) about the project. The purpose is to enable the CMACO and EPD to provide relevant input when the PMA application is for a project the failure of which may result in a loss of thrust or power.

MARPA noted several possible issues with the proposed Policy Statements. First, our comments noted that the policy as proposed could run the risk of burdening PMA applicants by delaying response time, as each FAA office took the opportunity to review the project. MARPA also noted the risk that differences of opinion between offices could be hashed out using an individual PMA application as the mechanism. This could also result in undue burden to the applicant. Finally, MARPA noted that inquiries by FAA offices about certain PMA projects could inadvertently alert TC holders of possible competition in a particular part market, and give that TC holder the opportunity to lock up the market before the PMA package is ever approved; a clear unfair competitive advantage.

Finally, MARPA noted that a certain provision uniquely included in PS-ANE-33.3-05 (the engine-PMA Policy Statement) was needlessly critical of PMAs and potentially harmful to the PMA industry. The sentence in question reads “[f]ailure of some of these engine PMA parts has resulted in unsafe conditions and the issuance of airworthiness directives.” MARPA explained that this sentence was inappropriate for two reasons. First, it incorrectly implies that PMA parts are abnormally unsafe and that TC products do not have a history of resulting in ADs. Second, the sentence in no way advances the purpose of the Policy Statement, which is to establish uniform standards for use of the CPN database. For these reasons, MARPA recommended the deletion of the sentence.

MARPA will continue to work for its members to advise and cooperate with the FAA in crafting fair and effective policy. Members comments on these issues are always welcome.

Last month, MARPA joined with a broad coalition of U.S. industry associations and representatives who together signed on to a letter to the U.S. House of Representatives in support of current legislative efforts to enact reform of the regulatory process. The multi-industry letter emphasized the importance of creating a level playing field for citizens regulated by federal agencies, holding agencies accountable to the public, and improving the transparency of agency actions.

Transparency and participation between federal agencies and the citizens they regulate is an important part of the regulatory process. Rulemaking processes that are opaque or secret can result in regulations that are not only unduly burdensome, but which also may ignore important advances in industry practices and techniques, due to an absence of industry participation and information. Such regulations also undermine industry confidence in the regulatory agencies and can lead to unjust or unreasonable penalties as a result poorly drafted rules or rules that are unworkable in practice.

The legislation before the House of Representatives, H.R. 2804 Achieving Less Excess in Regulation and Requiring Transparency (ALERRT) Act, draws upon concepts described in a number of other bills. Several key elements are included in the ALERRT Act:

Federal agencies will submit monthly or yearly reports describing planned or final rulemakings to the Office of Management and Budget (OMB). OMB would then release information about those rulemakings, including cost and benefit, to the public.

The Administratve Procedure Act will be updated to provide greater transparency to the public during the rulemaking process. This is particularly important in light of the recent increase in regulations creating million- or billion-dollar burdens on industry.

Bring more transparency to the “sue and settle” process under which outside advocacy groups often take control of an agencies agenda and regulatory priorities.

Expand the scope of required regulatory impact analyses under the Regulatory Flexibility Act.

By enacting the above mentioned reforms, Congress can help to create a level playing field for its citizens, better hold agencies accountable to the public, and improve the transparency of agency actions. Improved access and confidence in the regulatory process should result in fewer unduly burdensome or unworkable regulations and encourage increased stakeholder participation in the rulemaking process.

Many of MARPA’s PMA members also hold repair station certificates, so the entire MARPA community will be interested to know that the decade-long saga that is the Repair Station Security rule is finally coming to a resolution. The rule is scheduled to be published in the Federal Register on Monday.

The repair station security rules are authorized under the repair station security statute (49 U.S.C. 44924). That statute barred the FAA from issuing any new foreign repair station certificates until TSA security audits were completed for existing stations. Now that the rules are out, once TSA has audited all existing repair stations, the FAA may be able to once again start issuing foreign repair station certificates. Of course, this must be balanced against the comments of FAA Deputy Associate Administrator John Hickey who suggested last Spring that the FAA may not have the resources to process the applications when TSA issues its rules.

Throughout the foreign certificate hiatus, we’ve advised MARPA members who are interested in pursuing new foreign repair station certificates to file applications with the FAA in order to secure their place in the queue when the restrictions are lifted. In private meetings with FAA officials, we’ve been told that the FAA does not intend to strictly follow the first-in-first-out approach to these applications, but companies who desire new foreign repair station certificates ought to start working immediately in order to be able to pursue and support those applications with the FAA.

The final rule contains the following requirements:

To Whom Does the Rule Apply?: The regulations apply to repair stations certificated by the FAA under Part 145, except repair stations located on a U.S. or foreign government military base. All repair stations are subject to inspection as provided in the rule and to Security Directives should there be a security need. However, the rule text requires only certain repair stations, discussed below, to carry out security measures on a regular basis.

TSA Inspection Authority. Repair stations must allow TSA and other authorized DHS officials to enter, conduct inspections, and view and copy records as needed to carry out TSA’s security-related statutory and regulatory responsibilities. For repair stations not required to carry out security measures on a regular basis (i.e., those repair stations not located on or adjacent to an airport), TSA does not intend to inspect such facilities, except (1) for compliance with security directives issued by TSA and with airport security programs required by TSA (for those repair stations that are included in an airport security program), and (2) to respond to security information provided to TSA by U.S. or foreign government entities.

Implementation of Security Measures: The security measures in this rule cover repair stations that are on or adjacent to certain airports. TSA will consider a repair station to be “on airport” if it is on an air operations area (AOA) or security identification display area (SIDA) of an airport covered by an airport security program under 49 C.F.R. part 1542 in the United States, or on the security restricted area any commensurate airport outside the United States regulated by a government entity. TSA will consider a repair station to be adjacent to an airport if there is an access point between the repair station and the airport of sufficient size to allow the movement of large aircraft between the repair station and the area described as “on airport.”

What are “Security Measures?”: Repair stations required to implement “security measures’ will be required to (1) designate a point of contact(s) to carry out specified responsibilities; (2) prevent the unauthorized operation of large aircraft capable of flight that are left unattended; (3) verify background information of those individuals who are designated as the TSA point(s) of contact; and (4) verify background information of those individuals who have access to any keys or other means used to prevent the unauthorized operation of large aircraft capable of flight that are left unattended.

Security Directives: Repair stations are required to comply with Security Directives (SDs) issued by TSA. We had objected to Security Directives to the extent that they could represent rulemaking activities promulgated in the absence of notice and comment rulemaking procedures. TSA has added language to the final rule to clarify that repair stations may comment on SDs issued by TSA, but TSA has imposed on itself no obligation to respond to such comments. Thus, we remain concerned that Security Directives could be used to promulgate new rules in circumvention of the notice-and-comment requirements of the Administrative Procedures Act.

Notification of Deficiencies; Suspension of Certificate and Review Process: The regulations describe the process whereby TSA will notify the repair station and the FAA of a security deficiency identified by TSA and provide an opportunity for the repair station to obtain review of a determination by TSA to suspend its operating certification. Such a suspension would be an immediately-effective suspension that would not be stayed through petition for review (note that 49 U.S.C. 44924(c) already requires the FAA to suspend or revoke a certificate upon the advice of TSA). This could give TSA tremendous power to impose interpretations of their standards that may be beyond the published scope of the rule, and the repair station may be largely powerless to seek review of those standards, because the only practical way to seek review is to be accept suspension during the entire period of the review process (TSA is allowed to grant itself an extension so the time limits on TSA action may be meaningless). TSA would perform an internal review of the petition for review and would create the record but then the matter would be subject to review by a Court of Appeals.

Immediate Risk to Security; Revocation of Certificate and Review Process: The regulations specify that when TSA determines a repair station poses an immediate risk to security, TSA will notify the repair station and the FAA that the certificate must be revoked. The regulations also provide the process for the repair station to obtain review of such a determination. Many of the same concerns regarding suspension apply to the revocation process as well.

Today, EASA issued an updated agenda for the 2013 EASA / FAA International Aviation Safety Conference. The Conference is the annual meeting among EASA, FAA, TCCA and other regulators to discuss new paradigms in regulatory oversight. This meeting directly impacts the aviation industry, which is the subject of this regulatory oversight!

The updated agenda provides better guidance on what to expect from the 2013 meeting.

Sessions that will be interesting to member of the PMA manufacturing community will include:

We have written recently on this blog about the important SMS/Part 21 Aviation Rulemaking Committee (ARC) and corresponding Working Groups in which representatives of MARPA are now participating. The result of this ARC promises to affect each and every manufacturer of PMA in some way or another. MARPA will therefore be there every step of the way, working to ensure that the interests of PMA community are protected. But in order to ensure that we guard our members’ interests, we will need your assistance and feedback! We are therefore asking MARPA members to tracks and share with us the cost of regulatory compliance.

The Regulatory Flexibility Act requires agencies to attempt to fit the burdens of a proposed regulation to the scale of businesses. This recognizes the fact that the same regulatory burden that may simply be the cost of doing business to a large multinational corporation may be crippling to a small company. Recognizing the extreme importance of scalability in the promulgation of the new Part 21, one of the four Working Groups is dedicated solely to undertaking a Cost-Benefit Analysis of the proposed regulatory changes.

This is where MARPA member feedback will be of extreme importance. The Cost-Benefit Analysis Working Group needs data to better understand what the current cost of compliance to small business actually is. This will function as a baseline from which to determine the benefits and costs of the proposals generated by the other three Working Groups. As the Working Groups craft the new regulations they will turn to industry to obtain data demonstrating the effects of the proposed changes.

It is vital that MARPA members participate in providing data to the Working Groups as the new proposals are developed and those assumptions tested against hard data. Hidden costs of compliance with regulations, under-estimations of costs, and over-estimations of benefits have the potential to result in an overly burdensome regulation. The participation of MARPA members in providing data to the ARC Working Groups will go a long way toward shaping an effective regulation while minimizing the burden on small businesses.

Input from members helps MARPA to more effectively advocate for policy changes that benefit the PMA community. Responses to requests for information such as this—or for data regarding the Streamlined PMA Process—helps MARPA to focus its resources to optimize benefit to the membership.

MARPA looks forward to the participation of its members in shaping the future of Part 21. Although the Working Groups have not yet begun to approach industry with requests for data, MARPA would like to get started early. If your company tracks the cost of regulatory compliance, whether in dollars, personnel, man-hours, paperwork, or any other metric, we want to hear from you. Your confidentiality is important to us, so MARPA will only report data in the aggregate; no individual data will be released and no company names will be revealed. You can send this data to MARPA Associate Counsel Ryan Aggergaard at ryan@washingtonaviation.com. Please also send Ryan an email if you have any questions or would like to start tracking compliance costs.

The SMS/Part 21 Aviation Rulemaking Committee (ARC) opened a three day meeting this morning in Rosslyn, Virginia. The meeting expands the scope of the ARC to include four working groups that will develop the new rules for certification and approval of aviation products and articles. MARPA staff attended the live meeting and MARPA members participated by dial-in teleconference. This project will definitely affect every MARPA member and could be the most important rulemaking activity affecting the PMA community in over 60 years!

Dorenda Baker is the Director of the FAA Aircraft Certification Service. Ultimately, the ARC reports to her. Baker explained that the FAA is committed to taking the ARC’s recommendations and moving forward with those recommendations to craft a rule that meets our ICAO SARP obligations (SMS or Safety Management Systems). She stressed that we need to take into consideration how this rule will apply to both large and small companies. It needs to achieve safety goals for everyone.

Some of the points that Baker raised included these:

The FAA is committed to this project and has assigned significant staff resources to support the effort. The FAA recognizes that this is more than a matter of complying with ICAO requirements: it represents the future of aircraft certification.

With sequestration and impending sequestration –related furloughs, it is even more important to streamline certification, and to have clear safety accountability for manufacturers.

In the area of the 787, the NTSB will be holding hearings and it is clear from the media coverage of the 787 concerns that the general public does not understand what FAA and industry do to ensure safety. This tells us that outreach will be very important in order to educate people about how the new system (that the ARC recommends) will effectively support safety.

FAA is working on its five-year plan, and one of their initiatives is the single surveillance system (working with our partners to ensure global safety). This project should support that effort by harmonizing to the ICAO SMS obligations.

MARPA has been centrally involved in drafting the working group charters in order to ensure that the ARC recommendations will support the next generation of safety management. Baker’s commitment to protecting the interest of both small companies and large companies is encouraging; but the details will be important to the PMA community and there is plenty of opportunity to see a rule that does not work well. With this in mind, this could be one of the most important projects that MARPA has ever worked-on for the future of the PMA community. MARPA will remain at the heart of this process in order to ensure that the interests of the PMA community are protected.

Have you ever wanted to influence the regulations that affect your business? Well, NOW is your best opportunity to do so!

In January, we provided early notice to the PMA community that the FAA would be seeking industry experts to volunteer for working groups that will be rewriting the manufacturing regulations. Now, we are collecting names and submitting them! This is a tremendous opportunity to make sure that the regulations reflect the current state of the art for certification and approval processes.

The Part 21/SMS Aviation Rulemaking Committee (ARC) is undertaking a major project to review Part 21 and (1) to make it consistent with ICAO Standards for Safety Management Systems, (2) add regulations to create a design organization and (3) update the regulation as necessary.

The Part 21/SMS ARC has recently completed charters for four (4) working groups that will be helping to craft the Part 21 language as well as developing a new paradigm for FAA oversight of systems. These worknig groups will report to the ARC, and will be where the real ground work occurs in changing the manufacturing regulations. We are seeking MARPA members who would like to volunteer to be on these committees. The first working group meetings will likely be April 3-5 and working group members will need to support the working group efforts through 2013 (final Reports are due December 10, 2013).

The four working groups are:

(1) Design Organization: This working group will develop regulations for design organizations, similar to the DOA regulation in Europe. Design organizations will have more safety responsibility and accountability, and in turn would receive greater privileges. The goal of this group will be to help the FAA create design organizations that can serve as the backbone for safety management.

(2) Safety Management Systems (SMS): This working group will help to integrate requirements for safety management systems in to the FAA manufacturing regulations. The goal of this group will be to better align the FAA’s regulations with the requirements of SMS.

(3) Oversight: This working group will develop a new model for FAA oversight that will better reflect risk management in an era with shrinking government budgets and expanding industry need for government approval and/or certification. The goal of this group will be to help the FAA create a program to ensure a consistently high level of safety with a dwindling resource pool.

(4) Cost-Benefit Analysis (CBA): This working group will examine the work of the first three working groups and will help develop the data and other tools that the FAA will need to perform a cost-benefit analysis. The work of this group will be critically important to ensuring that the product from the entire ARC makes good safety sense and good economic sense.

This effort could reflect the most significant change in the U.S. aviation manufacturing regulations in over 50 years. The results of this effort will touch all of us. If you think you would like to serve on one of these working groups then please contact us immediately so we can send you more information. We need to submit our recommendations to the ARC by the end of next week, so we need to hear from you by not later than Thursday, March 7.

Our topics for discussion will likely include PMA developments, streamlined PMA for non-safety-sensitive (NSS) parts, Instructions for continued airworthiness, air carrier needs, and tax laws and regulations with a particular affect on PMA parts manufacturers. In addition to our speakers, we will be discussing our government affairs program and strategic planning for the Association.

The Winter meeting is an intimate opportunity to work closely with the Association and the Board on topics of special interest to MARPA members.

If you would like to attend the meeting, please RSVP to MARPA at (202) 628-6777. There is no charge for registering for this meeting; and the meeting is open to all MARPA members.